PRINCIPLES OF BANKING

Q.No. 1 2 3 4 Questions Answers A Public Sector Bank is a Body True Corporate created under special statue. Banking Company is registered under the Banking Regulation Act. False

Co-operative banks are registered under True the Co-operative Societies Act Subsidiaries of State Bank are False Companies registered under Companies Act. Accepting Deposits for safe Custody would fall within the definition of Banking. Reserve Bank was constituted under ________ Regional Rural Bank is ________ Banking Companies are licensed by ________ False

6 7 8 9

RBI Act A body corporate created under special statute. Registrar of Companies

Business which a Banking Company Banking Regulation Act may undertake other than Banking is as stipulated by ------BR Act was enacted for __________ Regulating Banking Companies

10 11 12 13 14

Central Government can give direction to True the Reserve Bank. All Business of banks are Regulated only False by the Reserve Bank Central Government is the primary regulator of Banks. The State government has no control over the Co-operative Banks On cancellation of License of any Bank an appeal lies to Central Government False False

15

True

16 17 18 19

Co-operative Banks operating in Multi unit Co-operative societies different states are regulated by _______ Act. Government can exempt a bank from provisions of BR Act _______________ On recommendation of RBI

_________exercises the Central Banking Reserve bank of India function in India Company matters of a Banking Company Companies Act are regulated by the authorities under __________ Trading in shares and securities by banks is subject to control by______________ Which authority grants license for establishing a new bank in India. Which factors are taken in to account while considering an application for starting a new bank in India. SEBI

20

21 22

RBI 1. Information about the promoters / promoters group source of binding of the Capital. 2. Professional Management support. 3. Geographical area to be serviced. 4.Business mix 5. Types of economic activities to be financed. 6. Profitability of the operations. 7. Ability of the proposed bank to pay its deposits in full as their claims arises.

23

Name the authorities which control the functioning of Co-operative Banks.

1. RBI control functions like branch licensing ,Area of operations, exposure norms, interest rates etc., 2.State government control functions like Incorporation and registration of Co-operative banks, Management Audit, Amalgamation, Liquidation/Winding up. Branch expansion with in the district does not require prior permission of RBI

24

How are Regional Rural Bansk established?

1.Under section 3 of the Regional Rural Banks Act, 1976, a sponsor bank has to apply to the Central Government. 2.Central Government establishes the RRB by notification in the official Gazette and subscribes 50% of the capital. 3. The State Government concerned subscribes 15% and the 4. sponsor bank subscribes the balance 35% of the capital.

25

Do Banks have authority to close their Rural Branches which are not viable according to them?

Special permission of RBI is required for closure of branches in rural areas. Relocation / merger / closure of branches in metropolitan/urban areas can be carried out by banks subject to reporting to the RBI

26

Can Commercial Banks accept foreign currency non resident (FCNR) deposits at all their branches.?

For undertaking foreign exchange business including acceptance of non resident foreign currency deposits at specific branches permission has to be obtained from RBI. 1. Branches 2. Regional / Zonal /Circle Offices & 3. Head / Central Office.

27

Name the three tiers of Organisational structure common amongst Indian Banks?

28

What would be the minimum paid up capital requirements for a new Commercial Bank.?

To establish a new private sector bank, RBI stipulated a minimum paid up capital of Rs.200 crore. In case if a bank incorporated out side India and doing business in India the requirement of minimum capital fund is $50 million is stipulated. This sum is required to be deposited with RBI either in cash or in unencumbered approved securities.

29

What is the present minimum capital adequacy ratio to be maintained by commercial bank?

The present minimum Capital Adequacy Ratio (CAR) is 9%

30

Name the different components of Tier II 1. Un disclosed Reserves and capital Cumulative Perpetual Preference Shares 2. Revaluation Reserves (at a discount of 55%) 3. General Provision and loss Reserves up to a maximum of 1.25% of total mix weighted assets. 4. Hybrid Debt capital instruments. 5.Sub-ordinated debt.

31

Is there any restriction on voting rights of shareholders of a bank?

Share holders of commercial banks can exercise one vote for every share is held by them. However, no person can exercise more than 10% of the total voting rights of shareholders of a bank. Five years

32

A whole time director of a banking company can be appointed for a maximum period of ____years A whole time director of a banking company cannot be appointed as a director of any other company. What are the exemptions?

33

Subsidiary of a banking company or a Company registered under section 25 of the Companies Act, 1956 (ie) a company formed for promotion of commerce, art, science, religion, charity etc., which applies its profits in promoting is objects and does not pay any dividend. Under Section 20 of Banking Regulation Act 1949 none of the directors of a Banking company can be sanctioned any loan or advance by the banking company. Nor can any of the directors ..a guarantor to a loan or advance by the Banking company. Banking Regulation Act

34

Can a director of a bank avail of a loan from the bank? Can be guarantee repayment of an advance granted by that bank to another person?

35

Section 5(b) of ________Act gives the definition of term Banking.

36 37

Principal function of the bank are___________ In a deposit account the principal relation ship between Banker and Customer is Bank_____and the Customer__________. When a bank lends money the relation between Bank and Customer is Bank____and Customer__ In case of Safe Custody of articles relation between Bank and Customer is Bank_______and Customer _________. In case of Safe Deposit locker the relation between Bank and Customer is Bank________and Customer_____________. An Individual can start a bank. A Banking Company should have the word Banking in its name. A company engaged in manufacture of furniture can use the word Bank in its name. Ledger keeper is authorized to disclose the balance of the account of the customer to a stranger.

Accepting deposits from public for lending and investment. Debtor, Creditor.

38

Creditor, Debtor

39

Bailee , Bailor

40

Lessor, Lessee.

41 42 43

False True False

44

False.

45 46

Lien is a /an ____of the creditor to retain Right possession. Where as General Lien gives right to Right to sell retain goods, Bankers lien has ______in case of default General Lien gives the creditor right to All goods retain _______which have come in to his possession. Particular Lien given the Creditor right to Specific goods retain __________in case the expenses incurred are not paid. Bankers lien is a /an __________ Implied Pledge

47

48

49

50 51 52 53 54

In case of _____ Bankers Lien is not applicable. The right to ____two accounts is called as set off The right of setoff is _________.

Stolen Goods Continue Banks Direction

Right of set off is not discretionary right False with the Bank. With the death of a partner of a firm False having Cash Credit account the account to the firm can be continued as hitherto Transfer of funds from the partners False account to the credit of the account of a partner to set off a debit balance is in order. Garnishee order is issued by___________ Attachment order is issued by ___________ Mandate is _____________ Power of Attorney is _________ Person to whom a power of attorney is given is called ______and the person who gives the power of attorney is called________. A letter of mandate is generally issued for a short or temporary Period. Mandates are accepted from limited companies and co-operative societies . The court of Law Revenue Authority Unstamped letter to the bank. Stamped Document. Agent , Principal.

55

56 57 58 59 60

61 62 63

True False

Special Power of Attorney gives False extensive powers to the agent to perform money acts. Garnishee Order is issued by the Revenue Authority. False

64 65

Attachment Order is issued by the Court False of Law.

66

Promissory notes, Bills of Exchange and Negotiable Instrument Act. Cheques are together defined as ____________ Negotiable Instruments are easily__________. A Cheque is drawn on a ______ A Cheque is payable on ________ Two Parallel transverse line across the cheque is called _______________ Crossing is a direction to the ______to pay the cheque to the payee through a bank. Transferable. Bank Demand Crossing Paying Bank

67 68 69 70 71

72 73 74 75

When a Cheque is drawn on a bank, the Drawee bank is called______ The Crossing in a crossed cheque can be cancelled by_________ Acts done honestly is acts done _________ Mere signatures of the payee on the reverse of the instrument is called ____endorsement Sans recourse means _____________. A cheque is a bill of exchange. Drawee of a cheque is not a banker. A Promissory note can be crossed. A Cheque needs acceptance Drawer. In good faith Blank

76 77 78 79 80 81 82 83 84

Without liability to me. True False False False

A Holder in due course accepts True Negotiable Instrument for consideration. Crossing of a Cheque can be done by drawer only. Transfer of Negotiable Instrument will not get a better title transferor. A cheque can be issued payable after 3 months from the date of issuance. False False False

85 86

A Banker on whom a cheque is drawn by Paying Banker the customer is_____________. A Banker who collects a cheque for and Collecting Banker. on behalf of his customer is____________. Section 131 of the NI Act extends protection of the _____________. Section 85 of the NI Act extends Protection of the _________________ When a banker makes payment of a cheque after banking hours he will be held __________. One of the conditions to honour the cheque by the paying banker is that amount in words and figures should___________. Collecting Banker. Paying Banker.

87 88

89

Liable

90

Tally

91

Where a customer by a letter has Stop Payment letter. advised the bankdirecting the banker not to honour/pay a particular cheque such a letter is called_______. Where a customer has issued a cheque date of which is yet to come such a cheque is called ____ Post dated Cheque.

92

93

When a bank pays a cheque according to Payment in due course. the apparent tenor in good faith and without having reason to doubt the bonafide of the presentor such a payment is ____________. To get the protection under Section 131, Crossed Cheque. a collecting banker has to collect a ____ for credit of his customer. Payment of cheque must be made by the True banker within banking hours. Payment of a post-dated cheque by a banker is in order. A /bearer cheque is always payable to bearer. False True

94

95 96 97

98

Payment of a cheque at a branch other False than the branch where it is payable is in order. Stopped payment cheque should be paid False by the banker.

99

100 If a cheque is stolen in transit and Would not be held liable. presented at the drawee bank by a holder in due course case, and if the cheque is paid by the bank in due course in such a case the drawee bank .. 101 Where the signature of the drawer of the Forged Cheque cheque is not genuine such cheque is called ______ 102 A forged Cheque is a Valid cheque False

103 True owner of cheque will be entitled for False payment even when the cheque has been lost and it has reached the hands of holder in due course 104 Where a person has lost an article and if True the article comes in possession of a bonafide purchaser, the bonafide purchaser will not be entitled to the article. 100 Section 138 states that drawer of a cheque is liable to be punished of the cheque is bounced for_____ Insufficient Funds

101 When a drawer draws a cheque without One year. keeping sufficient balance and if the cheque is dishonored for insufficient funds, the drawer is punishable with and imprisonment which may extend to ___and or a fine. 102 Demand Deposits are those which can be withdrawn _______. 103 Current Deposits are not entitled to ________. On Demand Interest.

104 In Savings Bank Deposits interest is paid Minimum. on _____balance in the account between

10th to last working day of the month. 105 Introduction in all deposits accounts is 106 A Minor below age of 7 can open account independently. 107 When a customer dies, contractual relation ship between the bank and the customer is terminated. 108 A will need not be probated by a Court. 109 If a customer tenders a cheque for payment when he is drunk bank should not have witness at the time of signing and the payment. 110 A Partner has no implied authority to admit the liability in any suit client filed again the firm. 111 Public Limited Company should have a minimum of at least ______members True Compulsory. False

False False

True

Seven

112 Government Companies are Companies 51% where the Government holds at least _____Shares of the Company. 113 Section _______ of the Companies Act, details the borrowing limited of a Company. 293(1)

114 The Trustees ____delegate their Powers Can not 115 Execution of a will is entrusted to____. 116 Administrator is a person appointed by ______ to look after the property under letter of administration. Executor The Court.

117 __________is a person appointed by the Liquidator court to winding up the affairs of the Company. 118 The person appointed by the court to look after the property under letter of administration is executor. 119 The person who is entrusted with the False

True

work of execution of will is called executor. 120 Trustees cannot delegate their powers. 121 No Loans should be granted to Clubs and Associations. 122 Section 293(i) (d) of Company Act stipulates the borrowing limits of a limited Company. 123 The Memorandum of Association stipulates Internal rules of a Company. 124 Articles of Association lays down the objects of a Company. 125 FCNR (B) accounts can be kept in the form of _________________. 126 Accounts jointly with residents can be opened in case of _________account. 127 Accounts jointly with residents cannot be opened in the case of __________accounts. True True True

False False Term Deposits. NRO FCNR and NRE

128 The term Non-Resident Indian means an True Individual being a Citizen of India or a person of Indian Origin outside India. 129 FCNR (B) account can be kept in the False Current, Savings and Recurring Deposits 130 Rates of Interest Payable on NRO, NRE and FCNR Deposits are left to the discretion of Bank. False

131 The Banker should not ______the Close account of his customer unless there is justifiable reason for the closure. 132 Pass book is a ____ transaction between Record of the customer and the bank.

133 When account is closed by the bank proper _____ should be given to the

Notice

customer. 134 Passbook is a copy of the Customers Account True

135 When a Banker closes the account of the False Customer he is not required to send any notice. 136 When a partner of a partnership account True who has got an account with the bank, dies the bank should close the account. 137 When a banker receives intimation of death of the customer, account is allowed to continue. False

138 The Present CRR and SLR requirements 6.5% and 25 are 139 Present minimum Capital adequacy Total weighted Assets. Ratio is 9% of _______________________ 140 New Prudential Accounting norms cover_____ 141 A borrowal account is designated as non-performing asset when the Interest and /or installment remains unpaid for ___________. Capital adequacy ,Income Recognition, Asset Classification and provisioning. More than 90 days.

142 RBI Ensures that banks operate with in On site, Off site set norms by conducting ____Inspection and _________monitoring 143 On site Inspection is followed by_____. Supervisory letter

144 Quarterly on-site visits are undertaken in Newly licensed banks respect of ___________during first year. 145 Frequency of First Tranche Returns is -- Monthly, Quarterly, Half yearly. 146 Second Tranche of OSMOS returns cover ____. 147 Under Section 37 of the Banking Regulation Act a moratorium order can be issued by the High Court for a maximum total period of ____ Liquidity and Interest rate exposures Six Months

148 When a Banking Company is placed under moratorium under section 45 of Banking Regulation Act, the RBI must prepare a scheme ______________________. 149 An order for winding up a Banking Company can be issued by ______________. 150 Principle functions of Banks are

Reconstruction of the Company or Amalgamation with any other bank.

The High Court

1. Accepting Deposits 2. Lending and Investing 3.Non-fund Business and remittance services.

151 In deposits accounts the main relationship between banker and customer is ______ 152 When a bank lends money to the corporate person the relationship is___

Debtor Bank Creditor Customer Creditor Debtor

153 Bailor Bailee relationship is applicable Keeping articles in safe custody in in ___ the bank 154 What relationship is created when the bank collets a cheque in clearing___________ Collecting bank and Holder.

155 When any FDR is lost by a customer of a Indemnity Bond bank what document is executed __________ 156 A Credit voucher for Rs44,444/favouring Tarun was wrongly posted to Varun Bose by the Bank, relationship established with Varun Bose is of _______________. Creditor and Debtor.

157 Mr. X has a Bank account and credited Honour the cheque. Rs.20 lakhs in it. Subsequently, he was arrested on charge of fraud. The Police informed the bank for not allowing withdrawals from his account. Two days later, bank receives a cheque of Rs.15,000/- favoring X s creditor . What should the bank do?. 158 Account holder X draws a cheque for Pay to Rajesh without any

Rs.5000/- favouring Rajesh (a minor aged responsibility of bank. 13 years) or bearer. Rajesh presents the cheque on counter duly singned on the Cheque. What should the banker do with the cheque of a minor? 159 Cheque drawn for Raj kumar or order is The paying bank willl get protection stolen. The thief made endorsement as under NI Act. Rajkumar on the cheque in his favour. The cheque is presented in clearing and paid by bank. True owner later on sent legal notice to bank. What is the liability of the bank? 160 After close of business hours by 1.30 Payment is not in due course since hrs, the account holder himself availed paid after reasonable time (ie) after payment.At 4.15 p.m., (after close of 1.45 1.30 hours late for today. hrs) income tax attachment order is received by bank. What would be the liability of paying bank? 161 Ritesh issued a cheque at 3.30 p.m (one hour after close of business hours of the bank) to shoba. She approached the bank and on request paid the money at 4.00 p.m. as late payment. Ritesh arrived to his bank and stopped payment of Cheque issued to shobha at 4.30 p.m., on the same day. Who is liable for loss? 162 Section 131 of N I Act gives Protection for collection of _______ Payment after business hours is not a payment in due course. Hence bank is liable, section 10(1) fof NI Act.

Cheques

163 Rajkumar wants a demand drafts striking Attestation of the signature of the the word Order and writing the word payee on a separate slip of paper by Bearer can bank help him? bank(without striking out the word Order on draft.

164 A draft purchased is reported lost and Bank cannot stop payment since it the purchaser wants to stop the payment is a promissory note. of the draft.Can the Bank doit? 165 Discuss the essential conditions for Right of Set off to the Bank. Money transactions. Both the accounts in the same name and rights. Implied agreement to keep the accounts distinct ant separate.

166 Objectives of KYC

- To ensure appropriate customer identification.

To monitor transactions of suspicious nature.

167 Sources of credit information?

- Information on visit to business premises, - On interview with borrower and from documents submitted, - Information from loan proposal

168 What qualitative information are available from loan proposals.

- Personal history of achievements health and interpersonal relationship with family. - Professional services and qualificationS , details of heirs and successors. - Track record business reputation, behaviour pattern for managerial skill and risk bearing capacity

169 Quantitative informations available from - Personal assets and liabilities of loan proposal are the borrower - Details of personal expenses/and resources for meeting the margin. 170 Demand deposits are those which can be - Demand withdrawn on_______ 171 Current Account deposits are not entitled to ___ - Interest

172 In savings account deposits interests is - Minimum paid on _____balance in the account between 10th to last day of month. 173 Merchant Bankers activity relate to 174 Advantage of lease financing - Equity and Equity related finance. - Alternative source of fund Arrangement for faster and cheaper credit Increased Capacity to borrow - Trading an Tax shield

175 Disadvantage of leasing

- None of the following - Deprivation of Asset ownership - Deprivation of asset in case of default - Attachment on owner going insolvent.

176 Advantage of factoring services to customer

Responsibility of collecting sales dues, absolve of sales ledger administration, absolve from Bad debts, Quicker payments by clients Over Trading, manipulation in invoices, not suitable to SMEs, Companies with few debtors. 1.Flexible finance through up-front payment 2. Obtaining off-balance sheet finance 3. Payment to suppliers more promptly for higher credit reputation

177 Limitation of Factoring

178 Advantages of factoring as a financial tool / facility

179

Disadvantages to Credit Card holders

Forged Charge slips

180 Lien is a /an ____ of the creditor to retain Right possession 181 Particular lien gives the creditor right to Specific goods/Securities retain______ in case the expenses incurred are not paid. 182 Bankers lien is an / a ___________. Implied pledge

183 Bankers lien is not applicable in case of 1.Safe Custody ____________ 2. Securities left negligently. 3.Debts undue. 184 Rights to combine two accounts by bank Set off. is called _______. 185 The right of set off is ____________. Banks discretion.

186 Garnishee order is issued by _________. Court of Law 187 Attachment order is issued by ________. Income tax Officer/ Sales Tax Officer

188 Mandate is ______agreement. 189 Power of Attorney can be _________.

Unstamped agreement Universal and Limited.

190 Person to whom a power of attorney is Donor, Donee given is called _______and also gives up is called _________ 191 Payment in due course mean s_______. Payment in accordance with apparent tenor. 192 Payment of cheques are governed by section under NI Act _________. 193 The liability of drawee of cheque is____ 10/31/85/126 sufficient funds /property applicable for payment / required to do so without default. Payment in good faith and without negligence.

194 Duties of paying Banker of crossed cheques are _______

195 Promissory notes /bills of exchange and Negotiable Instruments. cheques are defined as ________. 196 Cheque is payable on_________. Demand

197 Crossing is a direction to the ______bank to pay the cheque to the payee through a bank.

Paying

198 The crossing in a crossed cheque can be Drawer cancelled by__________. 199 Acts done honestly is called acts done _________ 200 Mere signature of the payee on the reverse of the instrument is called ____endorsement. 201 Sans recourse mean ___________. 202 A bank on whom a cheque is drawn by the customer is _________. 203 Section 131 of the NI Act extends In good faith. Blank.

Without liability to me. Paying Banker. Collecting Banker.

protection to the ___________. 204 Where a customer, by a letter has advised the bank directing the banker not to honour / pay a particular cheque such letter is called _____________. 205 Forged Cheque is a _______. Stop payment letter.

In valid cheque

206 Introduction in opening accounts is ___ Compulsory 207 Minor with self operation can open account if he/ she is above______, 208 Public Limited Company should have minimum share holders before opening bank account 10 years Seven

209 Government companies are those 51% companies where the government holds at least ______ 210 Delegation of powers under Trust is_____ Not possible

211 Which document stipulates internal rules Articles of Association of a company? 212 Minors account can be opened in the guardianship of __________. Mother or father.

213 Two or more Minors desire to open bank Cannot open. accounts in your bank, whether they can open? 214 Who is considered natural guardian for minors? Mother and Father

215 Who shall be natural Guardian in case of Husband married minor girl?

216 Sanjay, a minor aged 11 years ,desire to Father open banks savings account. His mother is illiterate and his father has became sanyasi. He has got both grand parents. Who will be his natural guardian? 217 In a Limited Company, Certificate of Yes, because Incorporation

Incorporation was obtained through a Memorandum which was signed by two persons for all the seven signatories. The signatures were forged. Will the bank accept memo as genuine for opening bank accounts? 218 There should be two persons to open a partnership account in a bank which is correct? 219 HUF Account is to be opened in a bank where three major persons are there X-Father, 2.Y -Son, 3.Xs Mother. Who can become kartha of HUF? 220 One of the directors of a Limited Company expired and cheques signed by him are presented for payment should the bank pay those cheques?

certificate is valid.

X aged 25 and Y aged 21

Mr.X

Can pay as a routine.

221 X a partner in the firm XYZ Co., wants to All Partners. open a bank account in the firms name. It requireS the signatures of .. 222 Securitisation is the process of Non performing Debts. acquisition of loans classified as______ 223 Authorised officer means___________ 224 Bonds or Debentures issued by Securitisation Company should bear interest not less than________ 225 By which act, any security interest created in favour of secured Creditor without intervention of courts? 226 Secured Creditor is liable for penalties for default under_____________. 227 Recovery of Loans and Advances are Possible under SARFAESI Act by____ Chief Manager in PSB 1.5% over Bank rate.

SARFAESI Act, 2002.

Transfer of property Act. Summary Trial by Bank or Financial Instituition

228 Securitisation is the process of________ Purchasing or Acquisition 229 Qualified Institution buyer means_______ 230 Bancassurance is nothing but Financial Institution , bank insurance company, SFC A packaged financial service offering both banking and insurance

products to customers to meet both insurance and banking needs. 231 Advantage to banks under Bancassurance __________________. Increased return of fee income from assets and Marketing and processing capabilities are available extensively. -Extensive training to entire staff at a heavy cost. -Development of IT System even in non profitable branches, -performance recognition and payment an incentives to employees for insurance business. 1.Cultural conflict and different nature in compensation to employees. 2.non achieving of targets and no convergence at branch level 3.Reluctance to one-stop service. 4.Possible source of conflict with existing customer.

232 What are the challenges before banks under Bancassurance?

233 Describe problems and key issues in Bancassurance?

234 What you feel could be future of Bancassurance?

1.Bank and insurance have strong similarities with bright future. 2. Cost of Providing services would reduce, resulting cheap insurance products 3.Wider range of services to clients of banks. 4.Better consumer protection under Consumer Protection Act. Financial Intermediaries Unit Trust of India Mutual Fund. 1.Adequate protection from state agencies 2.Easy liquidity of listed schemes 3.Unlisted open-ended schemes can be sold back.

235 Mutual funds are 236 Out of about 36 mutual funds in India, the major player is____________ 237 Mutual Funds offer advantage of

238 Mutual funds are able to provide higher

Doing speculative business in share

rate of return to the investor as

market and operating costs as percentage of net assets is very low (ie) 1.26%

239 Which is the most profitable (in terms of ICICI+SBI+CAN BANK net assets) mutual fund in India sponsored by banks. 240 In E-banking customers need not visit the bank to meet cash requirements of self through Automatic Teller Machine

241 Tele-banking service function is Voice processing available with bank computers, based on _______ 242 E-commerce refers to the exchange of information to any form of buying and selling by consumer by _____________ Paperless

243 In E-commerce the purchaser shifts his Virtual store on Internet. /her purchasing from a physical store to __________________ 244 What goods and services can be marked Real products. through e-commerce. 245 Write benefits to consumers of ecommerce? 1.Special tailored information 2.Multimedia presentation 3.Ability to place orders easily. 4.Rediff mail online services for payments. 246 Benefits of e-bankers to consumers? 1.Any where banking Any time banking the risk with cash Reduction in cost 2. 3.Lower 4.

247 Home banking services means and includes 248 The maximum loan that can be granted to a private retail trader dealing in nonessential commodities? 249 Motor vehicle can be financed to the following professionals under Priority Sector

Both cash and non cash transaction. Rs.10,00,000/-

Medical Practitioner

250 Mr.Suresh , a photocopier, request for a Cannot Sanction term loan of Rs.10.00 lakhs for purchase of 3 photocopying machines costing Rs.12.00 lakhs He will meet the WC requirements from his own resources. Manager can sanction the loan under Priority Sector. 251 Mr.Sathish runs a travel agency. He does Sanction if driving license is not know driving. He approaches the obtained bank for loan of Rs.7.00 lakhs for purchase and furnishing of the Van for travel and tour operator. Bank can 252 The maximum loan that can be granted under village and cottage industries is Rs. 253 Net working Capital/Margin means 254 The minimum percentage of priority sector advances to be maintained by foreign banks in India. 255 Which of the following scheme is not covered under weaker section 256 Loan of fish rearing is covered under priority sector as _______advance. 257 Training of Rural Youth for Self Employment (TRYSEM)relates to 258 Minor irrigation schemes includes 50,000/-

Money invested by the borrower 32%

PMRY Direct Agriculture. Self employment in rural areas. -Dig-wells -Tube/bore wells -Lift irrigation pumps

259 Tyre re-treading activity and coffee processing shall be treated as am industrial activity eligible under 260 The advances not falling under the priority sector is 261 Indirect agriculture advance means

SSI

Funds provided by sponsoring bank to RRBs Advances granted to profit motive institutions which help indirectly to agriculture or farming community. Safety and Liquidity, Profitability

262 Cardinal principles of lending are

and diversification of risks and productive purpose and security 263 Liquidity with a banker means Cash on hand, Cash and Bank balances, Short term current assets to convert into cash. Exercise before opening a new branch. By ensuring that there will be no default on account of lack of liquidity and lack of willingness to pay on the part of the borrower. Default of repayment by a borrower. Current Assets Current Liabilities Marketable investments and cash/receivables/inventories

264 Customer profitability analysis means 265 Banker can reduce risk in lending to a borrower

266 In Bankers parlance, credit risk in lending refers to 267 Net working capital means 268 Major Current Assets are

269 What are the sources of working capital? Trade credits+Unsecured loans+Deposits+Bank borrowing+Advance payments+Net working capital 270 Working Capital means 271 Term loans means Loans Requirement of day to day transactions -payable after one year to 10 year -repayment is done in installments -term loans are utilized for acquisition of fixed assets 272 Working capital needs are estimated by -Operating Cycle method -Projected Turn over method -Cash budget method 273 Difference between cash budget and cash flow? -Cash flow deals with cash -cash budget deals with cash transaction sonly -cash flow statements are for quarterly or half yearly while cash budgets for short periods

-cash budget is projection into future while cash flow statement is historical. 274 Advantage of cash budget could be -borrower plans in advance cash requirements -banker is able to spot danger signal quickly and corrective measures could be taken -banker can plan his resources to meet credit demands. 275 Is there any exposure ceiling for banks in providing advances/loans to borrowers? 276 Credit decisions are affected by risks like 277 When a loan will be NPA? 15 % of capital funds for single borrower and 40% in a borrowers group Credit risk /Market risk/Operational risk -Interest and /or loan installments overdue for more than 90 days. -Account is out of order more than 90 days in case of overdraft/cash credit -Bill remains overdue for more than 90 days in BP/BD 278 Charging of Interest at monthly rests Would make overdue 90 days from would/would not change overdue under previous quarter ending NPA 279 Advances granted to units placed under NPA rehabilitation package approved by BIFR/TLI are treated as 280 Working capital gap means Total Current assets-Current Liabilities other than bank borrowing Deducting net working capital from working Capital gap. A declaration by a company not to encumber assets of the company without previous consent of banker. Assignment

281 Maximum Permissible Bank Finance (MPBF)is arrived at by 282 Negative lien means

283 Charge created on policy is

284 Under law of limitation the liability of a guarantor is 285 A guarantor is liable only when 286 A Computer network mainly used to share ____

3 years from the date of innovation The guarantor is called upon to pay on default by the principle debtor. 1.Data 2.Software 3.Hardware

287 Terminals connected to server is known 1.Clients as 2.Nodes 288 For uninterrupted power supply in Online ups branch computerization following device is used____ 289 Proper functioning of computerized system is ensured by -Generation of audit trails -Exceptional transaction report -Tallying of Cash Book 290 In multi-user computer networking -Computers are based on centralized processing concept -Various terminals are attached to main computer -All data and information is kept on main computer -Large number of users can be connected to central computer. 291 In Star topology ____________________. Each node is joined to the central node by separate line. 292 In Bus topology is___________ Devices on the network one connected to a single continuous cable. Information is passed from one node to the other in series. -Branches are connected to central host. -Branch automation modules and

293 In ring topology______________. 294 In Core Banking System___________.

delivery channels incorporated. -Transaction is done centrally and online. 295 Benefits in Core Banking is____________. -reliable Centralised data recovery -Data warehousing and data mining technologies -Integrated customer centric services. -Core infrastructure can be used for future expansion. 296 ATMs provide________________. -round the clock service -Privacy in transaction -anywhere banking facility -quick and efficient service

297 From the banks, point of view the advantages of ATMs are__________________.

-alternative to expand banking hours -Cash handling and cash transportation is avoided -alternative to new branches.

298 PIN is_________________

-Randomly generated sequence of digits. -stored in magnetic strip of the card.

299 Security features available with smart cards are

-multiple pins -rational pattern verification -dynamic signature verification -vein recognition

300 The advantages of the processor smart cards are

-Security -reliability -longer life

301 Electronic purse may have following number of storage

Several

space____________________. 302 Cheque truncation can be done by__________. Using MICR data using image processing.

303 The Credit Card offers ______________. Revolving credit for certain period 304 The Debit card offers_______________. 305 Charge Card offers___________. 306 MODEM does the following__________. Online recover of amount of card usage. Pay off the entire amount of card usage. -modulates digital signals into analog. -demodulates analog signal into digital

307 A twisted pair cable consists of 308 A coaxial cable consists of ________________ 309 In optional fiber data is transmitted through___

Two insulated copper wire. An inner copper conductor held in position by circular spacers. -a very thin glass or plastic fibers beam of light. -laser beam driven by a high speed high current driver.

310 In micro wave systems _________________. 311 Message switcher is used to____________. 312 Multi Plexer is used to________________. 313 Front End Processor (FEP)is used to________. 314 A simple transmission is capable of________ 315 A full duplex transmission is capable of_______

Micro wave signals may be passed on to the satellite. Store and forward data to large number of terminals over a single communication channel. Send more than on e signal simultaneously over a single communication channel. Intercept and handle communication activities for the host computer. Transmitting data only in one direction. Providing simultaneous two way communication.

316 The committee which has recommended Vasudevan Committee for establishment of data warehouse is known as ______ 317 Data mining technique can be applied in_____ -predicting future trends based on information available. -Credit risk analysis -Analysis demographic information about customers. 318 Communication technology Helps in transmission of data.

319 Which of the following is the gateway in VSNL India for EDI services world wide? 320 The universal set of standards for EDI is EDI FACT. known as______. 321 Banks can use a corporate website for 322 Computer based information system offer____ None of these -data consistency -data redundancy -flexibility and ease for modification. 323 Decision support system (DSS) uses_______ -Query language -adhoc report generator -statistical analyser 324 Impact of IT on banks can be______________. -graphics

-change in organisational structure -change in organizational orientation -change in service delivery channel -change in customer aspiration.

325 Information technology has resulted in_____

-improved efficiency -innovative products -enhanced productivity

326 A typical computerized environment constitutes three interdependent but separate components 327 The risks broadly lead to

Software, Hardware and data.

-Incorrect decision making leading

to set back to business. -interruption in activities due to loss of data hardware, software people ware. -violation of privacy -Direct financial loss due to computer frauds. 328 The objective of computer auditing is_________ -assets safeguarding -preserving data integrity -Achieving system efficiency. 329 The consequences of errors in -computer systems process more computerized systems are more serious data. than in manual system -errors in computer systems are because_____________________. generate at high speed and the cost of correct may be high -users of computer system perceive the computer outputs to be always correct.

330 Compared to a manual system in a computer system

-the methodologies for implementing controls change -basic controls objectives change -control objectives are more difficult to achieve.

331 Segregation of duties in computerized environments is necessary because __________.

-it increase employees efficiency -unlimited access to various resources can be avoided. -it generates employment.

332 Risk prone components in computerized -errors and omission in data and systems. software -unauthorised disclosure of confidential information -computer abuse and mis-utilisation of banks assets. -frauds

333 Effective control mechanism in computerized environment _______________

-preventive -detective -corrective

334 Scope of system of Audit is to

-review of operations to establish compliance. -review of the adequacy of procedures and controls -integrity review focused at fraud detection / prevention of IT Systems

335 Audit trail is ______________. 336 Market is a geographical place when goods can be bought or sold 337 Marketing is not relevant to a temple. 338 Marketing is concerned with selling 339 Marketing implies meeting needs 340 The businesses became customer and market driven due to increased _____________.

A chronological record of all events occurring in a system. False False True Profitably Competition

341 Marketing identifies_______in customer Opportunities requirements 342 Thisdoes not represent a Market situation A stall distributing Kada Prasad in gurudwara

343 The markets are grouped in to different Location of market place types based on the geographical area, location of market place, product, Nature of transaction and volume of transaction. In the above statement the following is not correct. 344 This offering is not a service. Gift Coupon of a chain store

345 The act of obtaining a desired object Exchange from some one by offering something in return is called as a(an) 346 Economics use the term _____to refer to Market a collection of buyer and sellers who

transact in a particular product class. 347 Match the following: 1. Market 2.Service 3.Need 4.Market Condition 348 The identification and satisfaction of _______form the basis of marketing. Customer requirements 1.National Stock Exchange 2.Railway Ticket 3.Thirst 4.Many sellers few buyer

349 Marketing is concerned with the creation Exchange and maintenance of naturally satisfying _______relationship. 350 Wants for specific products backed by an ability and ________to buy them resulted in a demand. Willingness

351 The focus of modern marketing is an ___ Customer relationship management 352 One viewon classification of goods and Service services is that there is no such thing as service industries and that everybody is in ________. 353 Services have special characteristics namely _______which affect their marketing process. 354 Marketing activities can be performed not only by sellers but also by potential buyers. Intangibility, Inseparability hetrogenity and perishability True

355 Market comprises only actual buyers and False not the potential buyers. 356 Financial services are simpler hence they have different and simple characteristics than other services. 357 Marketing mix for services is easier to formulate than that for physical goods. False

False

358 Out of items mentioned below _______is Cresent Apartment Housing Society not a product. 359 Math the following : Associated features

Pepsi included in a combo at Mc donalds Dry fruits in a glass bowl in Diwali Gift Pack. Taj meal on Jet Airways flight ALL BANK in housing loan offering in Allahabad Bank.

The core Associated features A Brand Name

360 In banking services bank guarantee is at Basic a(n)_____product level customer value hierarchy.

361 Math the following: 1.External Commercial Borrowing availed by your banks customer 2.writing paper bought by your bank 3.petrol bought for car 4.Compact Discs.

1.Industrial Product 2.Material support 3. Consumer products 4.Non-durable goods

362 A Bank offers under mentioned products Credit Card. out of which ________does not belong to the product line of others. 363 A product has a life cycle comprising ____ number of stages. 364 The concept of product life cycle is not of much concern to marketers but to engineers or product developers. 365 The sales of new products in the introduction stage do not depend on _________ Four False

Product Brand Name

366 In the maturity stage the product has False established itself hence there is no need for any further marketing efforts. 367 Low sales, Marginal profit 368 Fast growth rising profits 369 Falling sales low margin Maturity Growth Decline

370 Out of the items mentioned below_____is not a product.

Visit to banks London

371 A product _______is a group of related Line products that function in a similar manner, are sold to the same customer groups and marketed through the same type of outlets. 372 Goods that are typically bought by a consumer based on a comparison of suitability, quality , price and style are called_____goods. Shopping

373 Out of the following_______is not one of Fragmented the three levels of a products. 374 A bank has a special productsfor senior Savings Account citizens which provides cheque book on savings accounts with customers name on cheque book, free of cost debit card with overdraft facility of Rs.20,000/-, a special pouch for holding pass book, cheque book and debit card, facility for withdrawal and deposits at any branch, free of card remittances to any branch of the bank, and free of card remittances to any branch of another bank covered under RTGS facility. Which of the following is core product in this offering? 375 Industrial goods are classified based on False the manner in which the purchasing agent shops for and buys the goods. 376 The characteristic of service that it False cannot be stored for future use is known as intangibility. 377 Product line consistency refers to the number of versions offered of each product line. False

378 Marketers are now developing offerings True that give total customer experiences so that their offerings are differentiated

from the competition. 379 A brand name should suggest something about the products benefits and qualities. 380 Match the following: 1.Product personality 2.Product level 3.Product Line 4.Product life Cycle 5.Asset 381 Out of the following _______is not an objective of pricing 382 Of the following pricing methods _______is not based on competitors pricing. 383 Of the following pricing strategies _____is not ideal for new products. 384 Price for any product is a constant. 1.The core 2.Core benefit 3.Product items 4.Decline 5.Brand Expansion of business Group pricing True

Discriminatory pricing False

385 One of the objectives of pricing is True getting cash inflows at the required time. 386 Perceived value pricing takes the buyers True perception into account 387 A______discount is offered by the seller Trade to intermediary who performs functions like selling, storing and record keeping. 388 In market skimming pricing strategy _______. 389 Bank of Kuber is offering 1% higher interest rate on fixed deposit to senior citizen of 60years and above. It is practicing ______ Initially price is higher and then it is reduced, Segmental pricing

390 With __________pricing the products are Promotional priced below list price (or even below cost) for a temporary period to create

buying urgency. 391 Of the following pricing methods ____is Value pricing not cost based method. 392 Trade discount is also called a functional True disconnect. 393 An aspect of psychological pricing is True reference prices that buyers carry in their minds and refer to when looking at a give products. 394 A firm should set a single price for a False product and keep it constant as it moves through its life style.

395 For segmented pricing to be effective members of the segment paying the lower price should be able to resell the products to the segment paying the higher price. 396 With product form segmented pricing different variants of the products are priced differently but not according to their costs. 397 Match the following: 1.Factor influencing price 2.Pricing method based on cost 3.pricing strategy for new product 4.promotional pricing 5.Product mix pricing 398 Marketing channel refers to

False

True

1.Usage characteristics of product 2.Target return pricing 3.Market generation pricing 4.Cash re trading 5. Two part pricing A set of independent organization involved in the process of making a product or service available for use or consumption. Marketing research. Client relationship

399 The function of distribution channel do not include_______ 400 Of the following characteristics _______is found only in some services

like banking and not found in case of many services. 401 The maximum number of entities at any False of the levels in a distribution channel is called the length of the channel. 402 In selection of the marketing channel the False product characteristics are relevant and market characteristics are of no consequences. 403 Banking is a service industry, however True as it is experience oriented the layout of the branch along with the interior dcor make an impact on the customer. 404 Distribution channels carryout the following functional except _________. Fixing the price

405 A direct marketing channel is also called Zero as ______level channel. 406 Computerised banking services have helped in working around the following characteristics _______. 407 Of the following intermediaries ______are not found works for banks. Inseparability and intangibility

Whole sellers

408 The following is not among the tests Servicing of the product. performed under physical distribution __ 409 For industrial products direct marketing True channel is better suited. 410 The location of the bank branches False should be convenient for maintaining management control due to risky nature of banking business irrespective of the customer convenience. 411 The branch network is a bank is affected True by RBIs policy among other factors. 412 Physical distribution function of False marketing distribution channel does not have an effect on service. 413 The two main modes of transport for goods in India are rail and roads. True

414 Match the following: 1.Distribution Channel 2.Number of levels 3.perishable products 4.Strong competition 5.Distribution centre 415 The tools for communication with the customer are ___________. 416 Promotion seeks to influence buyer in decision making through__________.

1.Levels 2.Length of marketing channel 3.Direct Channel 4.Two or three level channel 5.Storage warehouse equipped to dispatch goods quality on receipt of order. Promotion mix and other three elements of marketing mix -Persuasion -Reminding -Information and -reinforcement

417 Promotion is an exercise of maintaining Enhance customer relationship contact with the consumer at different levels so as to ______ 418 Promotion mix of a firm includes public relations. True

419 In Integrated marketing communications True the elements of promotion mix are blended. 420 Buyers behaviour stage is not relevant for determining the promotion mix. 421 An Advertisement is not for ______ 422 Direct marketing does not cover _____ False Explaining low a product works Public relations

423 Doller rupee co-operation bank with ten Star Plus channel on Television. branches in Mumbai shared not opt for _______as medium for its advertisement campaigns. 424 Personal selling is not on ideal medium to communication for_______. A product in decline stage.

425 Public relations element will not include A presentation made to the _ employees of udyog ltd., 426 Advertisement are best medium for False

personal communication with the customer. 427 Personal selling is s useful strategy for sellers in case of a decline stage of a products False

428 The current view to a sales man is that True they should be concerned more than just producing sales, and should be made to produce customer satisfaction. 429 Direct marketing has become the fastest True growing form of marketing. 430 Direct marketing has not proved to be a False useful tool for building lasting customer relationship. 431 Match the following: 1.Promotion mix 2.Sales promotion 3.Direct marketing 4.Public relations 5Promotion mix integration 1.Public relations 2.contests 3.A hoarding at the station 4.A Press report on centenary of the bank. 5.Strong message consistency

432 Marketing information system is ______. the structure of people,,equipment and procedures for generating and processing information 433 Marketing information system is Consumers, Channel Intermediaries, concerned with information about_____ Sales force. 434 The marketing personnel need information _____intervals. 435 Marketing information systems is necessary because information is just not available to the decision makers from any ready source. On a continuous basis and regular. False

436 Marketing Research uses the information False readily available from the secondary sources.

437 Marketing information system helps in validating information and sorting out conflicting information.

True

438 Firms need to collect and analyse the Taking the required steps for data pertaining to marketing for ______of effective marketing then modules. 439 A effective MIS fulfils these____________ Analysis of qualitative information coordination among functional and specialists executives.

440 The components of marketing Information technology system information system do not include ____

441 The ultimate users of the marketing information system are_______. 442 Which of the following situation falls under the purview of the Marketing research systems.

The decision making of the firm Baroda Branch of prosperous customer Bank is twelve years old and it recorded a compounded annual growth rate of 20% in deposits during the first ten years , which has been better than the industry average. However during the last two years the branch has witnessed a significant decline in its deposits. Managing Director of the bank desires to know the causes for this reversal in the business trend and suggestions for ameliorating the situation.

443 Marketing information system is not False concerned with the evaluation of information collected from either primary sources or secondary services. 444 The marketing information requirements False of a firm are very limited one for one time. 445 Marketing information system collects False and analyses the information as per the system initially prescribed and is not

concerned with the type of information required by management. 446 Typically most of the information for marketing information system is collected from secondary sources. 447 Consumer is of no relevance for the markets information systems since almost entire information is collected from independent sources. True

False

448 Match the following: 1.Marketing Research System 2.Marketing Intelligence System 3.Marketing information System 4. Customer Data base 5. Data Analysis

1. Data Collected specifically 2.Data base management 3.Major source published information 4.Geographic, demographic, psychographic, and behavioral data on customers and prospects. 5.operators research tools.